Colombia Outlook. December 2024

Summary

The Colombian economy is gradually recovering, driven by private consumption and an incipient rebound in investment. Inflation and interest rates continue to decline, although fiscal challenges and the need to strengthen domestic and external savings persist to ensure long-term growth.

Key points

• Key points:
• Global growth is projected at 3.2% for 2024 and 3.1% in 2025, with moderating inflation, although United States policies could generate upward pressure on prices and lead to a stronger dollar.
• Colombia's GDP will grow by 2.0% in 2024, accelerating to 2.5% in 2025 and 3.2% in 2026, favored by better credit conditions and the reactivation of the building construction sector.
• Inflation will close 2024 at 5.1% and converge to 3.6% in 2025, allowing the central bank to make additional cuts to the monetary policy interest rate, bringing it to 6.50% next year.
• The national unemployment rate will remain resilient, estimated at 10.2% by the end of 2024 and decreasing slightly to 9.9% by 2026, with persistent challenges in female and youth labor participation.
• The fiscal deficit will stand at 5.6% of GDP in 2024, requiring adjustments in public spending, while the current account deficit will widen to 3.5% in 2025, financed mostly by foreign direct investment.

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